Costly lawsuits on the agenda

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Costly lawsuits on the agenda

By HBSDealer Staff - 03/04/2019
A predatory lawsuit can cost an independent business as much as $100,000 to defend, regardless of the merits of the case. But a group of Texas pro dealers are raising their voice to change that.

The Lumbermen’s Association of Texas’ hammered on several pro-business initiatives in the state capital as part of the LAT Legislative Action Day on Feb. 27. One of the main targets of their lobbying efforts was the matter of out-of-control lawsuits.

"Legislators have the opportunity this session to pass bills to help stop frivolous claims in construction defects lawsuits and to shorten the period for suing for construction defects,” said Jimmy Pate, President of the LAT Board of Directors and president of Pate’s Hardware, Inc. “These reforms would not only help stop frivolous claims, they will help Texas dealers and suppliers potentially avoid the significant cost and time involved with certain lawsuits."

According to the Small Business Administration, it can cost as much as $100,000 to defend against a predatory lawsuit, which often forces dealers to settle the suit regardless of the merits of the case.

LAT’s Legislative Committee, co-chaired by Meagan McCoy Jones, president at McCoy’s Building Supply, and Tim Moore, chief legal counsel at Cassity Jones Lumber and Building Materials, released its 2019 legislative priorities to coincide with LAT’s 2019 Legislative Action Day in Austin.  Dealers from across the state met with over 30 legislators and staff, including meetings with Governor Greg Abbott, Speaker Dennis Bonnen and Comptroller Glenn Hegar.

At the Capitol, LAT members asked legislators to support LAT’s legislative agenda, including:

  • Create a “right to repair” for construction defects for public projects before a governmental entity can seek legal relief (HB 1999 by Rep. Jeff Leach)

  • Shorten the time period for suing for construction defects (“statute of repose”) from 10 years to 4 years for visible defects and from 10 years to 8 years for hidden defects. (HB 1737 by Rep. Justin Holland)

  • Protect Texas dealers’ ability to operate within existing Texas law governing mechanic’s, contractor’s and materialman’s liens; an essential tool to get paid for goods sold.

“Texas dealers and suppliers powerfully shared their stories with legislators in support of LAT’s policy priorities,” said Mireya Zapata, executive VP of LAT. “LAT is thankful to the Texas Legislature for listening to our member’s and for their support.”

The Texas Legislature meets every two years.  The current session began on Jan. 8 and runs through May 27. LAT will be in Austin ensuring that members have a voice, the association said.

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